How Santa keeps Christmas coming to town – on time and on budget

He’s making his list. He’s checking it twice… So far so ordinary, although Santa must have psychic powers (or one mighty CCTV network) to know who’s been naughty or nice. But billions of presents, complex supply chains, bespoke orders, deliveries to every corner of the world, all in 24 hours, on a twelve-month planning cycle?

Some serious financial management is making this operation happen year in, year out.

With Santa busy fulfilling his many executive duties (someone’s got to eat all those mince pies), we at SBA can only presume there’s some kind of Chief Elf FD-type running this thing. Want to see what small business owners could learn from this ultimate blend of independent entrepreneurship and 2.0 global logistics? Go on, it’s Christmas!

Staff progression, the elven way

The overall costs of employing the elves is just one consideration behind Santa’s Workshop Ltd. staffing decisions. The big man knows competitive reward packages and clearly defined career paths are essential if he’s to stop his most talented elves from jumping sleigh.

To gain a true picture of employment costs, small companies need to go beyond forecasting salaries and look at the cost of pay increases, promotions, benefits, and training and development. What’s more, accurate financial information can help leaders make the bold decisions needed to exploit growth opportunities.

Reindeers need flexible working too

As with many small businesses, 2016 has been a tough year for on the premises front.

There was the lease negotiation on the workshop, a garage extension for the new sleigh, and refurbishment of the stable where Rudolf and all of the other reindeer play their reindeer games.

Santa was clever enough to invest in the technology that facilitates Donner and Blitzen’s flexible working hours, and Dasher’s desire to work remotely from Hawaii for much of the year.

For small businesses faced with similar issues, much of the pressure can be relieved by introducing alternative working arrangements. Having real-time financial information at your finger tips can also help get an accurate forecast of your costs -useful to have for any lease negotiations.

Special delivery

As everybody knows, Santa is the master of same-day delivery. Orders come in thick and fast right up until Christmas Eve.

In today’s e-commerce economy, small businesses need to stay competitive by offering speed of delivery, while at the same time making sure they’re working the costs into their margin forecasts.

Merry marketing

Santa is also pretty handy when it comes to promotion. For two months of the year, his face is everywhere. He’s secured that global advertising deal with a global drinks giant, and has pop-up grotto franchises running all over the world throughout December.

Clearly, this is a big-budget campaign, of the sort that may be beyond small businesses. But a low-cost alternative might be to create a strategic marketing partnership. If you can find a partner with a great cultural fit, or the perfect audience alignment, both businesses can boost their brand visibility and reach new customers for less money.

Marketing should be seen as an investment, not a cost. You need to track the outcomes of your marketing strategies, to see what’s working and what’s not. With powerful data tools now more accessible than ever, small businesses can make better informed marketing decisions. You could always ask Santa for the latest real-time marketing measurement software this Christmas.

Chestnuts roasting on an open (supplier negotiated) fire

This is an area of financial management where Santa struggles. Competitive broadband rates and decent mobile coverage are hard to come by in his part of Lapland. And when your heating is by log fire rather than gas central heating, switching energy provider isn’t a money-saving option like it is for most small businesses.

However, he does make sure he shops around to get a cracking deal on his always-on 5G service – essential for getting around the world on Christmas Eve by using the map app on his phone.

Variations in utility pricing can make a huge difference to small companies, so it’s crucial to not just check you’re getting the best deal, but do it regularly and consistently.

Step (in line with your suppliers) into Christmas

Santa may be a jovial character, but he’s no pushover when it comes to negotiating a good deal with his suppliers.

At a time when certain small companies may find their costs going up, having an honest conversation with suppliers can make a huge difference, as well as assessing alternatives such as changing suppliers or sourcing from a different country.

Santa might have a better overview of global markets than most, but there’s nothing stopping small businesses that trade internationally from keeping track of global markets and exchange rate movements and doing the same.

All this said there is one area where small business owners outshine Santa. There may be 12 days of Christmas but there are 12 months to running a successful enterprise and not much time out for Strictly Christmas Specials. To all of you putting your passion, energy and dedication into some of the most exciting work happening anywhere in the UK, I wish you a well-deserved rest and a very happy Christmas.

KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.